Having taught entrepreneurship now for eight years, I find that many students use words that they cannot actually define. Such a word is "economics". Every business student takes macro and micro-economics, but how many students can give a concise definition. Fortunately Ben Bernanke, Fed Chairman, provides an elegant definition.
In a speech reported in Businessweek, Bernanke defined economics as " the allocation of scarce resources". Bernanke then went on to ask why we do economics, which lead to a discussion of the close relationship between economics and government policy. Bernanke believes that all the focus on economic indicators masks the real objective of economic policy and government. Quoting Adam Smith, Bernanke stated that government should provide "secure tranquility", what some would call happiness. Bernanke then went on to describe the Bhutan government index of happiness as possibly a better way to measure economic performance because it moves away from materialistic measurements in favor of more personal benefits. This concept moves us closer to Robert Schiller's (Yale economist) view of economics as a "moral science" where economics is “driven by the broad moral purpose of improving human welfare.” I like this concept because I find it hard to believe that the great (economic) thinkers have consistently ignored morality. I believe that even Milton Friedman, the "bad boy" of 20th century economics, recognized the need for morality in economic systems.
If we accept this concept of economics, the distinction, for example, between social entrepreneurship and traditional entrepreneurship may become trivial. The implied normative judgment in social entrepreneurship is not necessary if economics is a "moral science". Need to read more Schiller.
This is the link to the full Businessweek story. The story has many other interesting points on the history of economic thought and the changes in economics in periods of crisis.